Choppy jobs recovery could mean bumpy economic rebound

April's catastrophic jobs report is a sign that while the U.S. economy continues its post-pandemic recovery, the road ahead will be bumpy.

Only 266,000 jobs were created last month, shocking Wall Street and leaving the U.S. still about 8.2 million jobs short of the where the country stood before the coronavirus began to spread last year, killing just over 579,000 Americans and shuttering wide swathes of the economy.

The shortfall raises concerns about how quickly the U.S. economy can return to normal. Consumer spending, which has been steadily recovering and accounts for 70% of economic activity, can only push the economy so far. Fuller employment, and more people getting paid, will be needed to sustain an economic rebound.

“This report is a humbling experience for economists and strategists given the wide miss versus expectations,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management.

At April’s pace for job growth, it could take until the end of 2023 for employment to reach levels seen just before the pandemic hit. But, growth has been choppy and far more jobs were added in March. At that pace, employment would fully recover to pre-pandemic levels by the middle of 2022.

Consumers are growing more confident and opening up their wallets while manufacturers ramp up and travel demand rebounds. But with the employment market stubbornly lagging behind, it's been a reality check for an exuberant market projecting a steady and fast recovery this year.

“We anticipate the strong economic recovery to continue,” Nixon said. “It does, however, highlight our shared belief in the Fed’s view that there is a 'ways to go” before we get back to pre-COVID-19 levels of employment.”

The latest employment report also threw the market a curve, in that it painted...